Cerebras Systems, a California-based startup known for its AI chips, might postpone its initial public offering (IPO) due to a national security review of a minority investment from UAE's G42. The U.S. Committee on Foreign Investment is evaluating G42's stake in Cerebras, and this scrutiny could lead to the cancellation of the company's roadshow.
Cerebras filed for an IPO earlier this month, planning to list on Nasdaq under the ticker "CBRS." Their chips are renowned for training and running AI models, boasting more cores and memory than Nvidia's (NVDA) popular H100. Cerebras also provides cloud services using their own computing clusters.
Unlike the trend of miniaturization in chip design, such as Nvidia's H100 with 80 billion transistors on an 814 square mm area, Cerebras stands out with its oversized WSE-3 chip, claiming the largest area in the world. The WSE-3, cut from an entire wafer, contains 40 trillion transistors over a 46,000+ square mm area, fifty times those of the H100.
Financially, Cerebras reported $136.4 million in sales and a $66.6 million net loss in the first half of 2024. In contrast, the same period in 2023 showed $8.7 million in sales and a $77.8 million loss. Their full-year 2023 sales were $78.7 million, with a net loss of $127.2 million. The company's operational expenses have surged, partly due to increased staffing to support revenue growth.
Significantly, G42 accounted for 83% of Cerebras' revenue last year, with an agreement to purchase $1.43 billion worth of products by March 2025. G42 currently holds less than 5% of Cerebras' Class A shares but has options to acquire more based on future purchases. Other notable investors in Cerebras include Microsoft (MSFT), OpenAI CEO Sam Altman, and Sun Microsystems co-founder Andy Bechtolsheim.
